Coinbase has filed an application Lawsuits against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC), accusing the agencies of trying to cripple the crypto industry.
BREAKING: 🇺🇸 Coinbase files lawsuit against SEC, alleging regulators are trying to cripple the cryptocurrency industry. pic.twitter.com/bD1B1Vny1r
— Bitcoin Magazine (@BitcoinMagazine) June 27, 2024
The lawsuits, filed June 27 in the U.S. District Court for the District of Columbia, allege that the SEC and the FDIC failed to comply with Coinbase’s Freedom of Information Act (FOIA) requests. Coinbase says the information could shed light on a coordinated effort by regulators to restrict cryptocurrency access to banking services.
Coinbase asserts in its complaint that federal regulators are on a deliberate campaign to cut off Bitcoin and cryptocurrency companies from the banking system. This represents an existential threat to the industry by strangling its vital financial lifelines.
Coinbase says regulators are pressuring banks to deny accounts and services to bitcoin and cryptocurrency companies. It likens it to “Operation Choke Point,” an Obama-era initiative aimed at discouraging banks from working with certain “high-risk” sectors.
The exchange claims that regulators are violating transparency laws to hide the full extent of its crackdown on cryptocurrencies. Coinbase aims to expose regulatory abuses that it says go far beyond agency mandates.
However, legal experts warn that FOIA lawsuits face an uphill battle given agencies’ broad discretion over disclosure exemptions. It can also be difficult to prove malicious intent by regulators.
However, these cases represent the latest pushback by Coinbase against regulators like the Securities and Exchange Commission, with whom it is already locked in multiple legal battles. The exchange is defending the Bitcoin and cryptocurrency industry against regulatory hostility that threatens its very survival.
Coinbase’s accusations resonate with Bitcoin and cryptocurrency supporters who believe regulators are abusing their powers to intentionally slow technological progress.